Energy Bill [HL]

My Lords, to be helpful to the Minister, I was able to give him advance notice of the kind of questions that I wanted to ask about this clause. I am grateful that, earlier today, someone from his department e-mailed me, although I have not had a chance to look through those responses in detail. It would be helpful to raise some of these issues in Committee and to hear his responses. I feel that there is a lack of clarity about why this chapter is coming forward at this time. It is entirely appropriate—indeed desirable—that the Government move to consolidate the four pieces of legislation that currently exist in this area. That is helpful to the industry and to government. In consolidating, these clauses go a little further than the existing legislation. That is the area on which I seek clarification. I understand that in the future, where there is a dispute about a third-party operator seeking access to upstream petroleum infrastructure, the Government will seek commercial agreement. These clauses provide for the Government to seek to resolve the issue. Their role almost seems to be that of an arbiter, though it seems stronger than that. The Explanatory Notes clearly state: "““The Chapter gives the Secretary of State new powers to seek information about the progress of access negotiations; and where there is no realistic prospect of negotiations succeeding, to issue a notice granting relevant rights, without an application from any party””." In reality, I am not sure that that is how it works. The information that I have had from the department is that there has been a request to the Secretary of State to intercede where there has been no agreement. I think that we would want to avoid the Secretary of State becoming an arbiter in what is a commercial agreement or disagreement between two parties. If the Minister could give some clarification on when it would be appropriate for the Secretary of State to intervene, that would be helpful. The tone of the clause goes against what the Minister has said throughout this Bill: that it is market driven; that the market will provide; that the Government should not intervene. Yet here we have stronger government intervention. That intervention may be appropriate—I am just trying to seek the reasons why. I gather that this is the first time in 10 years that any company has sought the intervention of the Secretary of State. A note that I have had today says that possibly more would be forthcoming. Is that an indication that more are in the pipeline? Or has someone made an application—although there are not the powers to do so, and it is not what the Explanatory Notes say? Is it trying to use a sledgehammer to crack a nut because, in one case, the Secretary of State has been asked to intervene to help negotiations? We then bring forward legislation which gives power to the Secretary of State to intervene in ongoing commercial negotiations between two companies. Where does the Minister think the current provisions are defective? Why do we need to bring these provisions forward? Where an application has been made to the Secretary of State now, I am not clear what the difference is. It seems to be that the impetus can come from the Secretary of State to seek information on why the negotiations are not taking place or are not proceeding in an appropriate way, rather than someone seeking the Secretary of State to intercede. There is a difference here and I am not clear why that is. There is a legal remit at present for the Secretary of State to intervene, but that does not seem to be what is being put forward in this legislation. What discussions have the Government had with the industry and what was its response? The information from the department indicates that the industry is working to update its code of conduct, which is absolutely correct in order to reflect the new framework it is operating in. However, I understand that the industry has concerns that investment may be affected or hindered in some way. I wonder whether that problem has been raised with the department and what discussions are taking place to address it? So I am seeking further information and clarification, and the reasons why the legislation is coming forward. Is it a reasonable response at this stage to have this kind of legislation coming forward where a Secretary of State intervenes in commercial negotiations having never done so before?